Coastal Corporation credit ratings assigned and reaffirmed by CARE; BB; Stable
RATING
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MEDIUM RISK
📅 Filed on BSE: 09 Apr 2026, 06:08 PM IST · BSE ID: ce4e7523-d004-4655-86f2-199df91160d1
View Original BSE Filing (PDF)
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In Simple Terms
The credit rating agency CARE assigned and confirmed ratings for Coastal Corporation's bank loans, citing strong revenue growth and new ethanol plant startup offset by US tariff risks.
🤖 AI Summary
- CARE Ratings assigned new ratings to Rs. 68.28 crore long-term bank facilities: CARE BB; Stable
- Long-term/short-term facilities Rs. 13.50 crore assigned CARE BB; Stable / CARE A4 rating
- Enhanced Rs. 260.00 crore facility (from Rs. 234.00 crore) reaffirmed CARE BB; Stable / CARE A4
- FY25 revenue grew 45% YoY; ethanol plant operational since September 2025 contributed Rs. 103 crore revenue
- US imposes 50% reciprocal tariff August 2025; company pursuing market diversification to Japan, Europe, China, Russia
🔢 Key Numbers — exact figures from BSE filing, not rounded
Long-term bank facilities rated
Rs. 68.28 crore
Long-term/short-term facilities assigned
Rs. 13.50 crore
Enhanced long-term/short-term facility reaffirmed
Rs. 260.00 crore
FY25 revenue growth
45% YoY
FY25 production volume growth
48% YoY
Ethanol plant revenue contribution (Sept 2025 - Dec 2025)
Rs. 103 crore
Ethanol plant PAT contribution (Sept 2025 - Dec 2025)
Rs. 3.7 crore
Expected FY26 ethanol plant revenue
Rs. 230 crore
Ethanol plant project cost overrun
Rs. 35 crore
Overall gearing FY25
1.57x
Overall gearing FY24
1.28x
PBILDT interest coverage FY25
1.74x
PBILDT interest coverage FY24
2.12x
US export concentration
84% of total income
US reciprocal tariff rate
50%
Working capital cycle FY25
153 days
Working capital cycle FY24
163 days
Average collection period
25-40 days
🏢 How This Affects the Company
Ethanol plant commenced commercial operations September 2025, contributing Rs. 103 crore to revenue and Rs. 3.7 crore to PAT till December 2025, with expected Rs. 230 crore FY26 revenue. Company diversifying export markets to Japan, Europe, China, Russia following 50% US tariff August 2025.
Overall gearing increased to 1.57x in FY25 from 1.28x in FY24 due to higher total debt. PBILDT interest coverage declined to 1.74x in FY25 from 2.12x in FY24. TD/GCA remained moderate at 23.02x in FY25 versus 18.54x in FY24. Working capital utilisation remains high.
Working capital cycle improved to 153 days in FY25 from 163 days in FY24, driven by Red Sea crisis rerouting impacting inventory. Production volumes surged 48% in FY25 enabling third processing unit full-scale operations. Average collection period 25-40 days.
US geographic concentration (84% of total income from exports) increased risk following 50% reciprocal tariff August 2025. Working capital borrowings elevated. Industry subject to climatic conditions and regulatory oversight. Ethanol plant project cost overrun of Rs. 35 crore due to infrastructure additions and EPC contractor machinery delays.
👥 What This Means For Shareholders
✅
Action Required
No immediate action required. Monitor FY26 financial results for ethanol plant performance and tariff impact confirmation.
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Who Is Affected
All equity shareholders exposed to business concentration risk (84% US export sales) and working capital financing trends. Debt holders assess company's ability to service Rs. 260.00 crore enhanced facility.
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Management Signal
Rating reaffirmation despite gearing increase signals lender confidence in ethanol plant cash generation and management's market diversification strategy execution.
For information only. Not investment advice. ForgeUp is not SEBI-registered.
👁 Watch List — track these upcoming events
Q4 FY26 results — verify ethanol plant Rs. 230 crore revenue target and cash flow generation impact
Gearing ratio tracking — confirm movement toward 1.0x target or escalation beyond 1.50x negative threshold
Market diversification progress — track export volume shifts from US to Japan, Europe, China, Russia markets
MEDIUM RISK
US tariff exposure (84% exports affected by 50% rate), elevated gearing at 1.57x, high working capital intensity, and ethanol plant cost overrun require close monitoring.
💡 Investor Takeaway
CARE reaffirmed ratings on Rs. 260.00 crore enhanced facility. FY25 revenue grew 45% YoY; ethanol plant (operational September 2025) contributed Rs. 103 crore revenue till December 2025, expected Rs. 230 crore FY26. Gearing deteriorated to 1.57x; US tariff (50% August 2025) and market diversification efforts are critical watch items.
⚖️ Strengths & Concerns
✅ Positives
- Revenue increased 45% YoY in FY25 driven by 48% production volume surge from third processing unit full-scale operations.
- Ethanol plant operational September 2025, contributing Rs. 103 crore revenue and Rs. 3.7 crore PAT; expected Rs. 230 crore FY26 revenue.
⚠️ Concerns
- Overall gearing deteriorated to 1.57x in FY25 from 1.28x in FY24; PBILDT interest coverage declined to 1.74x from 2.12x.
- US geographic concentration at 84% of exports exposed to 50% reciprocal tariff imposed August 2025; working capital cycle remains elongated.